Investor Presentation January 2018 September 2017 Forward looking - PowerPoint PPT Presentation

Investor Presentation January 2018 September 2017

Forward looking statements 2 This presentation contains certain "forward looking statements". These statements relate to future events or future performance and reflect the Company's expectations regarding its growth, results of operations, performance, business prospects, opportunities or industry performance and trends. These forward looking statements reflect the Company's current internal projections, expectations or beliefs and are based on information currently available to the Company. In some cases, forward looking statements can be identified by terminology such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict" , "potential", "continue" or the negative of these terms or other comparable terminology. A number of factors could cause actual events or results to differ materially from the results discussed in the forward looking statements. In evaluating these statements, you should specifically consider various factors, including, but not limited to, such risks and uncertainties as availability of resource, competitive pressures and changes in market activity, risks associated with U.S. and Canadian sales and foreign exchange, regulatory requirements and all of the other "Risk Factors" set out in the Company's current annual information form for the year ended December 31, 2016 and the most recent management's discussion and analysis for the quarter ended September 30, 2017, which is available electronically at www.sedar.com. Actual results may differ materially from any forward looking statement. Although the Company believes that the forward looking statements contained in this presentation are based upon reasonable assumptions, you cannot be assured that actual results will be consistent with these forward looking statements. These forward looking statements are made as of the date of this presentation, and other than as specifically required by applicable law, the Company assumes no obligation to update or revise them to reflect new events or circumstances.

Market Facts 3 (As of January 8, 2018) MANAGEMENT LISTING MARKET SHARES 52-WEEK & BOARD PRICE SYMBOL CAPITALIZATION OUTSTANDING HIGH/LOW OWNERSHIP TSX:VFF CDN $7.76 ~CDN $326M 42.0M CDN $8.72 ~27% (basic) (basic) OTCBB: VFFIF ~CDN $349M 45.0M CDN $1.32 (diluted) (diluted) Listed on the TSX since 2006

Industry Leader in Large-Scale, High Tech, Low-Cost Greenhouse Growing 4 MASTER GROWER OWN TEAM WITH TECHNOLOGICALLY 10.5 M sq. ft. 750 YEARS ADVANCED (240 ACRES) OF GREENHOUSE FACILITIES OF EXPERIENCE GREENHOUSE CAPACITY 2016 REVENUE 1 C$209M INDUSTRY LEADER 30 YEARS 2016 EBITDA 1 IN PRODUCT C$12.6M QUALITY & SAFETY IN OPERATION 1. Converted to Canadian dollars at $0.75.

Premium Produce Grown In the Most Sustainable, Resource-Efficient Manner 5 Vertically-integrated provider of premium produce to grocers across North America Greenhouse growing produces a more Strategically located greenhouses and consistent, higher quality product that customers logistics and distribution chain ensure demand and that commands a premium price the freshest, highest quality produce Exclusive varieties address consumer demand Marquee customers across in the specialty growth segment the U.S. and Canada

Strategically Located Operations and Distribution Network 6 British Columbia VF Owned Ontario 3 facilities / 110 acres Partner (4.8M sq. ft.) Greenhouses Ontario: 70 acres Texas VF Owned British Columbia: 25 acres Mexico: 4 facilities / 50 acres 130 acres Mexico (5.7M sq. ft.) Our logistics and distribution chain ensures the freshest, highest-quality produce reaches consumers across Canada and the U.S.

Financial Profile 7 (All figures in Canadian dollars unless otherwise stated) At September 30, 2017 FY 2016 Cash: $5.5 M (US$4.3 M) Revenue: $209 M (US$156 M) Long-Term Debt: $55.0 M (US$43M) EBITDA: $12.6M (US$9.4 M) Margin: 6% EBITDA (C$ MILLIONS) REVENUE (C$ MILLIONS) $14.1 $13.8 $15 $12.6 $250 $11.3 $211.8 $209.1 $10.1 $196.9 $200 $10 $158.9 $147.2 $150 $100 $5 $50 $0 $0 2013 2014 2015 2016 LTM Q3/17 2013 2014 2015 2016 LTM Q3/17 LTM Net Income of $6.4 M and LTM EPS of $0.16

PURE SUNFARMS CANNABIS JOINT VENTURE: A TRANSFORMATIONAL OPPORTUNITY Low Cost, Industry-Leading Scale with Speed To Market

Ability to Capitalize on Market Opportunity 9 Transformational Market Need Opportunity Canadian Cannabis demand Apply low-cost, high tech estimated to grow to greenhouse growin ing expertis ise ~734,000 kg by 2021 1 4.8M sq. ft. of existing greenhouse capacity Projected shortfall of supply (potential yield of 300,000 kg ) based on current capacity and market demand Potential to address substantial portion of the market 1. “Legalized Cannabis: Fiscal Considerations” – Office of the Parliamentary Budget Officer, Government of Canada (2016)

Complementary Partners 10 50% Ownership 50% Ownership Joint Venture: Pure Sunfarms Large-scale, high-quality, low-cost High-tech, low-cost cannabis production Cannabis industry compliance greenhouse growing & and licensing expertise agricultural product Pure Sunfarms will safety expertise Cannabis IP, including portfolio sell dried cannabis of high-quality genetics Initial Contribution: and develop and sell 1.1 M sq. ft. (25 acre) Initial Contribution: its own extraction- greenhouse (leased to $20M cash based products Pure Sunfarms) Options for an additional 3.7 M sq. ft. (85 acres) of growing capacity

Leaders in High-Tech, Low-Cost Greenhouse Growing 11 750 years of combined master grower experience from around the world 30-year proven track record of operating mega-scale greenhouses Decades as an industry leading, fully integrated produce distributor Cannabis is an agricultural product like any other

The Pure Sunfarms Advantage 12 Pure Sunfarms greenhouses will be operated by veteran Village Farms personnel Extensive experience developing, launching and ramping up new crop operations (with record yields) Long-established greenhouse operations with proven systems Established, experienced workforce of ~600 at BC facilities Access to low cost electricity/no co-generation investment required Experts in agricultural product safety North America leader in pesticide registrations Global leaders in the advancement of greenhouse production technology

Advantages of Greenhouse Growing/Use of Existing Large-Scale Facilities 13 Greenhouse Growing Proven at a Greenhouse systems and controls create a required growing climate for the crop. Large Scale Greater Energy Using all available natural sunlight results in significantly lower energy needs (far Efficiency less artificial lighting, with little to no heat extraction requirements). Use of Existing Large-Scale Facilities Speed to Existing state-of-the-art greenhouses are significantly quicker to bring into Market production and have less risk than new construction. Management/growing teams at established greenhouses know their systems , Experience is have years of experience managing local climate conditions and, most an Asset importantly, have established labour workforces with an ingrained quality culture.

GOAL: Be the Low-Cost, High-Quality Cannabis Producer in Canada 14 Ingrained culture of high-quality, low-cost production built over decades conservative target of <$1.00/gram 1 Greenhouse growing provides significant capital and operating cost efficiencies vs. industry avg. of $2.20/gram 1 • Lower energy needs • Greater economies of scale • Allows for greater scale Conversion of existing state-of-the-art greenhouses with significant scale minimize capital costs 1. Four largest LPs – ACB, APH, LEAF, WEED. Source: Public company filings and independent analyst. Village Farms is one of the lowest-cost greenhouse growers of tomatoes & cucumbers in Canada/U.S.

Phase 1: Delta 3 Greenhouse 15 1.1 M sq. ft. of greenhouse capacity (25 acres) conservative projected yield of 75,000 kg annually potential to generate revenue of 10-15x that of produce projected EBITDA margins of >50% vs. mid-single digits for produce in Canada Significantly more profitable use of existing greenhouse assets

Step-Function Future Growth Opportunity 16 4.8M sq. ft. Delta 3 Delta 2 Delta 1 2.6 M sq. ft. 1.1 M sq. ft. 1.1 M sq. ft. (60 acres) (25 acres) (25 acres) (110 acres) of total growing capacity 24MW of 24MW of power secured power secured conservative projected yield of 300,000 kg Pure Sunfarms has options for Delta 1 annually and Delta 2 greenhouses D3 owned by Pure Sunfarms. D1 and D2 owned by Village Farms.

Critical Path and Key Milestones 17 Commence Complete Initiate File Conversion Conversion Generate Obtain Obtain Cultivation Cultivation of Delta 3 to of Full First Cultivation Selling 250,000 ft 2 License License Cannabis Cannabis License License Process Application Licensing of Quadrant 1 Revenue Standards of Delta 3 ✓ ✓ ✓ Expect to begin June September October Target: Target: commercial production 2017 2017 2017 February 2018 March 2018 prior to July 1, 2018 Target: 75,000 kg of production in 2020